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JAN S 1920 

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PRELIMINARY STATEMENT OF INDUSTRIAL CONFERENCE. 


I. INTRODUCTION. 

The Industrial Conference, convened by the President in Wash¬ 
ington on December 1, issues this statement in the desire that cer¬ 
tain tentative proposals be given considerate study by interested in¬ 
dividuals and organizations throughout the country. It will reas¬ 
semble on January 12 and will then carefully consider any con¬ 
structive criticisms that may be submitted to it. 

The Conference does not deem it useful at this time to enter upon 
a discussion of the causes of industrial unrest. It believes rather 
that its most important immediate contribution is the suggestion of 
practical measures which will serve to avert or postpone industrial 
conflicts. 

In confining itself to the proposal of machinery for the adjust¬ 
ment of disputes, the Conference is far from wishing to exaggerate 
the importance of the mechanical as contrasted with the human ele¬ 
ments in the situation. Our modern industrial organization, if it is not 
to become a failure, must yield to the individual a larger satisfaction 
with life. It makes possible a greater production of material things. 
But we have grown so accustomed to its complexity that we are in 
danger of forgetting that men are to-day more dependent on each 
other than ever before. The spirit of human fellowship and re¬ 
sponsibility was easier to maintain when two or three worked side 
by side and saw the completed product pass from their hands. Yet 
their cooperation was actually less necessary because each by himself 
was more nearly capable, if circumstances demanded, to meet the 
needs of life. To-day we have a complex interweaving of vital in¬ 
terests. But we have as yet failed to adjust our human relations to 
the facts of our economic interdependence. The process toward ad¬ 
justment, though slow, nevertheless goes on. The right relationship 
between employer and employee in large industries can be promoted 
only by the deliberate organization of that relationship. Not only 
must the theory that labor is a commodity be abandoned but the 
concept of leadership must be substituted for that of mastership. 
New machinery of democratic representation may be erected to suit 
the conditions of present industry and restore a measure of personal 
contact and a sense of responsibility between employer and em- 

155782°—19 • 3 



4 PRELIMINARY STATEMENT OF INDUSTRIAL CONFERENCE. 

ployee. The more recent development of such machinery with the 
cooperation of organized labor is a hopeful sign. But back of any 
machinery must be the power which moves it. Human fellowship 
in industry may be either an empty phrase or a living fact. There 
is no magic formula. It can be a fact only if there is continuous 
and sincere effort for mutual understanding and an unfailing recog¬ 
nition that there is a community of interest between employer and 
employee. 

Pending the growth of better relationships between employers 
and employees, the practical approach to the problem is to devise a 
method of preventing or retarding conflicts by providing machinery 
for the adjustment of differences. The Conference believes that it 
is possible to set up a more effective series of tribunals for the ad¬ 
justment of disputes than at present exists. To be successful, such 
tribunals must be so organized as to operate promptly as well as im¬ 
partially. There must be full participation by employers and em¬ 
ployees. There must be representation of the public to safeguard the 
public interest. The machinery should not be used to promote un¬ 
fairly the interests of organizations, either of labor or of capital. 
The plain fact is that the public has long been uneasy about the 
power of great employers; it is becoming uneasy about the power of 
great labor organizations. The community must be assured against 
domination by either. On the other hand, there must be equal as¬ 
surance that such machinery will not be used to discriminate against 
organizations of employees or of employers. Both should be pro¬ 
tected. The right of association on either side should not be affected 
or denied as a result of the erection of such tribunals. 

The plan which follows does not propose to do away with the ulti¬ 
mate right to strike, to discharge, or to maintain the closed or the 
open shop. It is designed to bring about a frank meeting of the 
interested parties and cool and calm consideration of the questions 
involved, in association with other persons familiar with the 
industry. 

The plan is national in scope and operation, yet it is decentralized. 
It is different from anything in operation elsewhere. It is based 
upon American experience and is designed to meet American condi¬ 
tions. To facilitate discussion, the plan submitted, while entirely 
tentative, is expressed in positive form and made definite as to most 
details. 

II. PLAN FOR BOARDS OF INQUIRY AND ADJUSTMENT. 

1. NATIONAL TRIBUNAL AND REGIONAL BOARDS. 

There shall be established a National Industrial Tribunal, and 
Regional Boards of Inquiry and Adjustment. 


PRELIMINARY STATEMENT OF INDUSTRIAL CONFERENCE. 5 

2. NATIONAL INDUSTRIAL TRIBUNAL. 

The National Industrial Tribunal shall have its headquarters in 
Washington, and shall be composed of nine members chosen by the 
President and confirmed by the Senate. Three shall represent the 
employers of the country and shall be appointed upon nomination of 
the Secretary of Commerce. Three shall represent employes and 
shall be appointed upon nomination of the Secretary of Labor. 
Three shall be representatives of the public interest. Not more than 
five of the members shall be of the same political party. 

The tribunal shall be, in general, a board of appeal. Its deter¬ 
minations on disputes coming to it upon an appeal shall be by unani¬ 
mous vote. In case it is unable to reach a determination, it shall 
make and publish majority and minority reports which shall be mat¬ 
ters of public record. 

3. INDUSTRIAL REGIONS. 

The United States shall be divided into a specified number of in¬ 
dustrial regions. The Conference suggests 12 regions with boun¬ 
daries similar to those established under the Federal Reserve sys¬ 
tem, with such modifications as the industrial situation may make 
desirable. 

4. REGIONAL CHAIRMEN AND VICE-CHAIRMEN. 

In each region the President shall appoint a regional chairman. 
He shall be a representative of the public interest, shall be appointed 
for a term of three years and be eligible for reappointment. 

Whenever in any industrial region, because of the multiplicity 
of disputes, prompt action by the Regional Board is impossible, 
or where the situation makes it desirable, the National Industrial 
Tribunal may in its discretion choose one or more vice-chairmen 
and provide for the establishment under their chairmanship of ad¬ 
ditional regional boards. 

5. PANELS OF EMPLOYERS AND EMPLOYEES FOR REGIONAL BOARDS. 

Panels of employers and employees for each region shall be pre¬ 
pared by the Secretary of Commerce and the Secretary of Labor, 
respectively, after conference with the employers and employees, re¬ 
spectively, of the regions. The panels shall be approved by the 
President. 

At least 20 days before their submission to the President pro¬ 
visional lists for the panels in each region shall be published in 
such region. 


6 PRELIMINARY STATEMENT OF INDUSTRIAL CONFERENCE. 

The panels of employers shall be classified by industries; the 
panels of employees shall be classified by industries and subclassified 
by crafts. The names of employers and employees selected shall be 
at first entered on their respective panels in an order determined 
by lot. 

The selection from the panels for service upon the Regional Boards 
shall be made in rotation by the regional chairman; after service 
the name of the one so chosen shall be transferred to the foot of 
his panel. 

6. REGIONAL BOARDS OF ADJUSTMENT. 

Whenever a dispute arises in a plant or group of plants which is 
not settled by agreement of the parties or by existing machinery, 
the chairman may on his motion, unless disapproved by the National 
Industrial Tribunal, and shall at the request of the 'Secretary of 
Commerce or the Secretary of Labor or the National Industrial Tri¬ 
bunal, request each side concerned in such dispute to submit it for 
adjustment to a Regional Board of Adjustment. To this end each 
side shall, if willing to make such submission, select within not less 
than two nor more than seven days, at the discretion of the chair¬ 
man, a representative. Such selection shall be made in accordance 
with the rules and regulations to be laid down by the National In¬ 
dustrial Tribunal for the purpose of insuring free and prompt choice 
of the representatives. 

When both sides shall have selected their representatives the 
chairman shall take from the top of the panels for the industry 
concerned, or in the case of employees for the craft or crafts con¬ 
cerned, names of employers and employees, respectively. The repre¬ 
sentatives selected by the two sides shall be entitled to a specified 
number of peremptory challenges of the names so taken from their 
respective panels. When two unchallenged names of employers and 
employees shall have been selected in this manner, they, with the 
chairman and the representatives selected by the two sides shall con¬ 
stitute a Regional Board of Adjustment. 

The appointment of representatives of both sides shall constitute 
an agreement to submit the issue for adjustment and further shall 
constitute an agreement by both sides that they will continue, or 
reestablish and continue, the status that existed at the time the dis¬ 
pute arose. 

The Board of Adjustment so constituted shall proceed at once to 
hear the two sides for the purpose of reaching a determination. Such 
determination must be by unanimous vote. In case the board is 
unable to reach a determination the question shall, unless referred to 
an umpire as provided in section 9, pass upon appeal to the National 
Industrial Tribunal. 


PRELIMINARY STATEMENT OF INDUSTRIAL CONFERENCE. 7 

7. REGIONAL BOARDS OF INQUIRY. 

If either side to the dispute fails, within the period fixed by the 
chairman, to select its representative, the chairman shall proceed to 
organize a Regional Board of Inquiry. Such Regional Board of 
Inquiry shall consist of the regional chairman, two employers selected 
in the manner specified from the employers’ panel, and two em¬ 
ployees selected in like manner from the employees’ panel and of the 
representative of either side that may have selected a representative 
and agreed to submit the dispute to the board. If neither side shall 
select a representative within the time fixed by the chairman, the 
Board of Inquiry shall consist of the chairman and the four panel 
members only. 

Upon the selection of a representative, within the specified time, 
the side concerned shall be entitled to the specified number of peremp¬ 
tory challenges as provided above. The representative shall have 
the right to sit on the Board of Inquiry and to take full part as a 
member of such board in the proceedings thereof. 

The Board of Inquiry as so constituted shall proceed to investi¬ 
gate the dispute and make and publish a report, or majority and 
minority reports, of the conclusions reached, within 5 days after the 
close of its hearings and within not more than 30 days from the 
date of issue of the original request by the chairman to the two sides 
to the dispute, unless extended on unanimous request of the board 
or the National Industrial Tribunal. It shall transmit copies of this 
report or reports to the Secretaries of Commerce and of Labor, re¬ 
spectively, and to the National industrial Tribunal, where they shall, 
be matters of public record. 

8. TRANSFORMATION OF THE REGIONAL BOARDS OF INQUIRY INTO 
REGIONAL BOARDS OF ADJUSTMENT. 

At any time during the progress of the inquiry at which both sides 
shall have selected representatives and agreed to submit the dis¬ 
pute for adjustment, the Board of Inquiry shall become a Board of 
Adjustment by the admission to membership on the board of such 
representatives. The side or sides which appoint representatives 
after the date fixed in the original request of the chairman shall, 
because of its delay, suffer a reduction in the number of peremptory 
challenges to which it otherwise would have been entitled. 

The Board of Adjustment so constituted shall proceed to the de¬ 
termination of the dispute as though it had been organized within 
the period originally fixed by the chairman. 

9. UMPIRE. 

When a Regional Board of Adjustment is unable to reach a unani¬ 
mous determination it may by unanimous vote select an umpire and 
refer the dispute to him with the provision that his determination 


8 PRELIMINARY STATEMENT OF INDUSTRIAL CONFERENCE. 


shall be final and shall have the same force and effect as a unanimous 
determination of such Regional Board. 

10. COMBINATION OF REGIONS. 

Whenever the questions involved in a dispute extend beyond the 
boundaries of a single region, the regions to which the dispute ex¬ 
tends shall, for the purpose of such dispute, be combined by order 
of the National Industrial Tribunal, which shall designate the 
chairman of one of the regions concerned to act as chairman in con¬ 
nection with the dispute in question. 

Two employer members and two employee members shall be chosen 
from the combined panels of the regions involved in the dispute 
under rules and regulations to be established by the National Indus¬ 
trial Tribunal. The members representing the two sides to the 
dispute shall be chosen as in the case of a dispute in a single region. 

A Regional Board of Inquiry or of Adjustment constituted for 
a dispute extending beyond the boundaries of a single region shall 
have the same rights and powers conferred upon a Regional Board 
for a single region. 


11. EFFECT OF DECISION. 

Whenever an agreement is reached by the parties to a dispute or 
a determination is announced by a Regional Board of Adjustment, 
or by an Umpire, or by the National Industrial Tribunal, the 
agreement or determination shall have the full force and effect of a 
trade agreement which the parties to the dispute are bound to carry 
out. 

12. GENERAL PROVISIONS. 

In connnection with their task of inquiry and adjustment, the 
Regional Boards and the National Tribunal shall have the right to 
subpoena witnesses, to examine them under oath, to require the pro¬ 
duction of books and papers pertinent to the inquiry, and their assist¬ 
ance in all proper ways to enable the boards to ascertain the facts 
in reference to the causes of the dispute and the basis of a fair ad¬ 
justment. Provision shall be made by law for the protection of 
witnesses and to prevent the misuse of any information so obtained. 

All members of the tribunal and boards heretofore described, in¬ 
cluding the chairman and vice-chairman, shall be entitled to vote. 

The President shall have the power of removal of the members of 
the tribunal and boards. 

In the presentation of evidence to the tribunal and the boards each 
side shall have the right to present its position through representa¬ 
tives of its own choosing. 


PRELIMINARY STATEMENT OF INDUSTRIAL CONFERENCE. 9 

The Secretary of Commerce and the Secretary of Labor in making 
nominations for the National Industrial Tribunal and in preparing 
and revising the regional panels of employers and employees shall 
from time to time develop suitable systems to insure their selections 
being truly representative. 

The National Industrial Tribunal, the Regional Boards of Ad¬ 
justment, and the Umpires shall in each of their determinations 
specify the minimum period during which such determinations shall 
be effective and binding. In case of emergency a Regional Adjust¬ 
ment Board or the National Industrial Tribunal may, after hearing 
both sides, alter its determination by abridging or extending the 
period specified. 

13. SPECIAL PROVISIONS. 

The terms of office of members of the National Industrial Board 
shall be six years; at the outset three members, including one from 
each group, shall be appointed for a term of two years, three members 
for a term of four years, and three members for a term of six years; 
thereafter three members, one from each group, shall retire at the 
end of each period of two years. Members shall be eligible for re¬ 
appointment. 

The regional panels provided for in section 5 shall be revised an¬ 
nually by the Secretaries of Commerce and of Labor, respectively, in 
conference with the employers and employees, respectively, of each 
region. 

14. RELATION OF BOARDS TO EXISTING MACHINERY FOR CONCILIATION 
AND ADJUSTMENT. 

The establishment of the National Industrial Tribunal and the 
Regional Boards described shall not affect existing machinery of con¬ 
ciliation, adjustment, and arbitration established under the Federal 
Government, under the governments of the several States and Ter¬ 
ritories or subdivisions thereof, or under mutual agreements of 
employers and employees. 

Any industrial agreement made between employers and employees 
may, by consent of the parties, be filed with the National Industrial 
Tribunal. Such filing shall constitute agreement by the parties that 
in the event of a dispute they will maintain the status existing at the 
time the dispute originated until a final determination, and that any 
dispute not adjusted by means of the machinery provided through 
the agreement shall pass on appeal to the National Industrial 
Tribunal for determination, as in the case of a dispute submitted on 
appeal from a Regional Board. 


10 PRELIMINARY STATEMENT OF INDUSTRIAL CONFERENCE. 

III. OBJECTS OF PLAN. 

The main objects of the above plan are to secure national coordi¬ 
nation and to stimulate the formation of bodies for local adjust¬ 
ment. The requirement of unanimity of agreement has by experience 
in the United States proved remarkably successful and should assure 
such confidence that neither side can rightfully refuse to submit to 
adjustment. A precedent condition of such submission is that the 
interruption of production shall be delayed. The frank meeting of 
the parties in controversy together with other men skilled in ques¬ 
tions at issue always gives promise of settlement. On the other 
hand; refusal to submit to the board not only inaugurates a legal 
inquiry but also prejudices the obstinate party or parties in public 
opinion. Moreover, the fact that membership on the board of in¬ 
quiry is available to either party to the conflict singly would tend 
further to weaken the position of the other. When both parties join, 
the board at once becomes a Board of Adjustment, and conflict 
ceases by agreement until a determination is reached. 

IV. STATEMENT AS TO PUBLIC UTILITY INDUSTRIES. 

The plan here proposed presents greater difficulties in application 
to certain public utilities than to competitive industry. The continu¬ 
ous operation of public utilities is vital to public welfare. As the 
capital invested is employed in public use, so is the labor engaged in 
public service; and the withdrawal of either with the result of sus¬ 
pending service makes the people the real victim. While continuous 
operation of all utilities is conducive to the general convenience of 
the people, that of some of them is essential to their very existence. 
Of the later class the railways are a conspicuous example and bear 
the same relation to the body politic as do the arteries to the human 
body. Suspension produces practical social and economic anarchy 
and may impose hardship even to the point of starvation upon large 
sections of the community. The interruption in such essential public 
utilities is intolerable. 

The Conference believes that a plan of tribunals or Boards of 
Adjustment and Inquiry should be applied to public utilities, but 
in the adaptation of the plan two problems present themselves. 
First, governmental regulation of public utilities is now usually 
confined to rates and services. The Conference considers that there 
must be some merging of responsibility for regulation of rates and 
services and the settlement of wages and conditions of labor. Such 
coordination would give greater security to the public, to employee, 
and to employer. Second, is the problem whether some method can 


PRELIMINARY STATEMENT OF INDUSTRIAL CONFERENCE. 11 

be arrived at that will avert all danger of interruption to service. 
These matters require further consideration before concrete pro¬ 
posals are put forward. 

V. STATEMENT AS TO GOVERNMENT EMPLOYEES. 

The Government is established in the interests of all the people. 
It can be conducted effectively only by those who give to its service 
an undivided allegiance. The terms and conditions of employment 
in the Government service are prescribed by law. Therefore no 
interference by any group of Government employees, or others, with 
the continuous operation of Government functions through con¬ 
certed cessation of work or threats thereof can be permitted. 

The right of Government employees to associate for mutual pro¬ 
tection, the advancement of their interests, or the presentation of 
grievances can not be denied, but no such employees who are con¬ 
nected with the administration of justice or the maintenance of pub¬ 
lic safety or public order should be permitted to join or retain mem¬ 
bership in any organization which authorizes the use of the strike 
or which is affiliated with any organization which authorizes the 
strike. 

The Conference is not now expressing an opinion upon the pro¬ 
priety of the affiliation of other classes of Government employees 
with organizations which authorize the use of the strike. 

The principles above stated are not to be construed as inconsistent 
with the right of employees individually to leave the public service. 
It is, further, an essential part of the application of these principles 
that tribunals shall be established for prompt hearing of requests 
and prompt remedy of grievances. The legislation of the Nation, 
the States, and the municipalities should be improved in such a way 
as to prevent delay in hearings and to enable speedy action when 
there are grievances. 

VI. FURTHER WORK OF THE CONFERENCE. 

On reconvening the Conference will continue its consideration of 
tribunals for the furtherance of industrial peace in general industry 
in the light of whatever criticisms and suggestions the publication 
of its tentative plan may call forth. It will receive reports of inves¬ 
tigations that are being made for it. On the basis of such reports 
and of further study of these and the other subjects within its field, 
the Conference hopes that it may be able to contribute something 
more toward the better industrial relations described in the words 
addressed to it by the President when he called it into being—rela¬ 
tions in which “ the workman will feel himself induced to put forth 


12 PRELIMINARY STATEMENT OF INDUSTRIAL CONFERENCE. 


his best efforts, the emploj^er will have an encouraging profit, and 
the public will not suffer at the hands of either class.” To this end 
it invites the cooperation of all citizens who have at heart the realiza¬ 
tion of this ideal of a better industrial civilization. 

The President’s Industrial Conference. 


(Signed) 

W. B. Wilson, 

Chairman 
Herbert Hoover, 
Vice Chairman 
Martin H. Glynn 
Thomas W. Gregory 
Richard Hooker 
Stanley King 
Samuel W. McCall 

Attested: 

Henry R. Seager, 

Executive Secretary . 

December 19, 1919. 


Henry M. Robinson 
Julius Rosenwald 
Oscar S. Straus 
Henry C. Stuart 
F. W. Taussig 
William O. Thompson 
Henry J. Waters 
George W. Wickersham 
Owen D. Young 

Members 


library of congress 



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